The Australian dollar extended Friday's Asian session downtrend against its major counterparts during early European deals also despite a rally in stock markets.

The stock market in Australia ended higher for the fifth consecutive trading session on Friday, taking cues from Wall Street, where markets ended higher.

In Sydney, the benchmark S&P/ASX 200 index rose 25.7 points or 0.70% to 3,672, and the broader All Ordinaries index gained 29.30 points, or 0.80%, to 3,616. Investors resorted to profit taking after a strong rally in the past few trading sessions dragging the indices from the day's high.

The Aussie hit as low as 68.38 against the Japanese yen and 0.6974 against the US dollar by about 3:30 am ET Friday, compared to yesterday's closing values of 69.29 and 0.7018, respectively. If the Australian dollar slides further, it may likely find support near the 67.2 level against the yen and 0.690 level against the greenback.

In the New York session, US Personal income expenditure report and University of Michigan consumer confidence survey are slated for release.

Against the currency of Europe, the Australian dollar fell to 1.9455 by about 1:20 am ET Friday. Since then the pair has been seeing uncertainty in direction and is now quoted at 1.9386. The euro-Aussie pair closed yesterday's deals at 1.9286.

Germany's Federal Statistical Office announced that the import price index dropped 5.4% year-over-year in January, after falling a revised 4.1% in December. This was the steepest decline since February 1999. Economists were looking a decline of 6% for January.

On a monthly basis, import prices dropped 0.5% in January, following a 3.6% fall in December. Economists had predicted a decrease of 0.4%.

The Australian dollar hit a 2-day low against its Canadian counterpart, sliding to 0.8573. The next downside target for the Aussie-loonie pair is seen around the 0.852 level. The Aussie-loonie pair closed yesterday's deals at 0.8637.

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